Investment Philosophy
  • Investing in highly complex businesses increases risk and frequently results in poor outcomes.
  • Risk is a multifaceted concept. While we understand and accept the use of index benchmarks for performance comparisons, our risk control methods emphasize avoiding mistakes in assessing the companies we own and minimizing the performance impact when a mistake does occur. A "margin of safety" for individual holdings and assuring portfolio diversification far supersedes concerns related to benchmark risk.
  • Our conviction in individual holdings varies based on our assessment of the fundamentals and the margin of safety. Position size is directly related to conviction.
  • All holdings, even wonderful businesses, should be sold when the market price becomes too dear.
  • Our money is invested the same way we invest for our clients.
  • For identifiable reasons, stock prices fluctuate in relatively wide ranges around company valuations.
  • Bottom up stock selection is the highest quality source of excess return.
  • Our opportunity universe is a market of companies, not a stock market. We own partial interests in businesses, and our investment time horizon reflects this view.
  • It is important to have thorough knowledge about a company and its industry. However, the key is to identify where our insights differ from the market and understand our degree of conviction in these insights.
  • High levels of diversification are a weak substitute for knowledge. Our strategy is best accomplished by concentrating investments in the 25 to 35 best values we can find.